Italy's mainstream centre-left and centre-right political parties suffer humiliating defeats

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While Italy is no stranger to political uncertainty, the rise of the populist parties - which may have taken as much as almost 50 per cent of the vote when all is said and done - is a shot across the bows for the traditional centre-left or centre-right parties that have formed the foundation for decades of Italian government.

Salvini added: "The team with whom you must talk and govern is the centre right".

In a bitter personal defeat that appeared unlikely last week, the billionaire media magnate's party looks nearly certain to be overtaken by its ally, the far-right League, which campaigned on a fiercely anti-migrant ticket.

With counting almost complete, the M5S has won 32.6% of the votes for the lower house of parliament, the Chamber of Deputies.

Former Italian prime minister Matteo Renzi resigned on Monday as leader of the centre-left Democratic Party (PD) after a bruising election defeat, but pledged that his party would not strike deals with the anti-establishment parties that voters favoured.

Anti-establishment parties M5S, which will become the country's biggest party, and the League posted stronger-than-expected results with 32% and 18% of the vote respectively, making it a possibility for the two to form a government.

The anti-establishment Five Star Movement (M5S), founded in 2009 by comedian Beppe Grillo, emerged as the single largest political force in parliament, after securing 32 per cent of the vote, but it can not form a government unless it strikes an alliance with other parties.

Lorenzo Codogno, a former chief economist at the Italian treasury, said: "Be prepared for long and complex negotiations that will take months".

"The Italian people have asked us to be in opposition and that is where we will go", Renzi said". Now we can see it was also politically short-sighted.

Fast forward 24 years to the, and not only is Berlusconi still FI's leader (and indeed owner), but, together with a renewed Lega, he has again managed to assemble an electoral coalition that could end up in government.

Financial markets have nothing to fear from the victory of the rightwing populist League, Salvini said. Italy is forecast to remain the slowest growing economy in the eurozone this year.

However, the political uncertainty did not immediately provoke major market jitters: The main index on the Milan stock exchange ended Monday's trade down by 0.42%. In the Netherlands, the Labour Party has been nearly totally wiped out, going from 25% of the vote in 2012 and governing in a coalition, to just 6% in the general election past year.

Five-Star and the League once shared strong anti-euro views, but 5-Star now says the time for quitting it has passed.

Besides confirming the upswing for populist, right-wing and euroskeptic forces in Europe, the election verified the weakened status of the two political parties that have dominated Italian politics for decades - Forza Italia and the centre-left Democrats.

The movement's leader, Luigi Di Maio, immediately asserted his right to govern Italy.

The 5-Stars had a remarkably strong showing in the south, which has always been a stronghold of the centre-right and Forza Italia.

"The European Union is going to have a bad night", Marine Le Pen, leader of France's National Front, tweeted.

"It is striking how this country, a founding member of the European Union, is gripped by disappointment with Europe", she added. Any government based on that combination would be euro-skeptic, likely to challenge EU budget restrictions and be little interested in further European integration.

In a statement Monday, the group's managing director, Martin Wansleben, noted Italy is Germany's sixth biggest trading partner, with a 2017 bilateral trade volume of 121 billion euros ($192 billion Cdn). Even the formation of a government is not certain.